NBN chief says Coalition broadband plan more costly

NBN chairman Harrison Young says the network is an ‘elegant solution’ for local conditions.
Photo: Tamara Voninski

by
John McDuling

The Coalition’s alternative broadband policy could be more expensive over the long term and preserve
Telstra
’s dominant market position, NBN Co chairman
Harrison Young
says.

He defended Labor’s $37.4 billion National Broadband Network as an “elegant solution" to the dual problems of Australia’s substandard broadband infrastructure and distorted market structure, which is dominated by Telstra.

A fibre-to-the-node network, based on extending fibre to street corners rather than individual homes, could create more delays and give Telstra “ineradicable advantages" because it would require continued access to its copper wires.

“You might find that negotiating such an arrangement slowed the project down more than you were willing to accept," he said.

“You might find you were still tangled up in Telstra’s legacy IT, which could only be navigated with Telstra’s help, turning code into bottleneck infrastructure and giving Telstra ineradicable advantages."

Mr Young said that though a fibre-to-the-node network might appear to be cheaper in the short term, over the long term it could cost more than the NBN to maintain Telstra’s ageing copper network and legacy IT systems.

“The apparent cost advantage of fibre-to-the-node decreases as you lengthen the timeframe you look at," said the NBN chairman, who was speaking at a Committee for Economic Development of Australia lunch on Monday.

Opposition communications spokesman
Malcolm Turnbull
has promised to deliver a scaled-down version of the NBN more quickly and cheaply than Labor by using fibre-to-the-node technology.

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He said in a statement that his plan “does not undermine the structural separation objective any more than does the NBN leasing Telstra’s ducts".

Mr Young said that keeping Telstra and Optus cable networks active would deprive the NBN of high-value customers, threatening its ability to offer uniform prices across the nation.

Asked whether he was concerned about the low take-up rate of the NBN’s high-speed services, Mr Young said: “Basically we are not particularly worried about the current take-up. All innovations are taken up on a sort of ‘S curve’ where it’s initially quite slow and then it picks up quite a lot, and then it slows down.

“Another thing you need to remember about the NBN is that Telstra is decommissioning its copper network. If people want telephones, they have got to come to us."

Mr Young said the fibre optic lines NBN Co would use are “unlikely to be supplanted" over its 10-year construction period.

But he admitted the NBN would probably be forced to upgrade aspects of its infrastructure, with new equipment to deliver faster services needed by the time it was completed.

“By the time we finish our roll-out, we’ll probably be putting in active equipment that doesn’t exist yet, and we are perfectly prepared for that."

Mr Young welcomed media scrutiny . “NBN Co gets a lot of mention in the media. Many people have opinions about the project. This is good. We are spending a lot of the public’s money. There ought to be scrutiny of our plans and performance."